The IISExpress is greyed out as a choice to attach to because it
seems there is a constraint only allowing .Net 2.0. Now, I don't
know that is actually case, only what I can infer from the screens.
Is there anything I can give/show/steps to help find the real issue?

Nobody has tested Profiler with IISExpress but supposedly you can profile IISExpress.exe as a desktop application. Actually in theory it should work a lot better than the current IIS support, which is not without its' problems.

As Brian says, if you've been trying to profile using the "Attach to process" profiling mode, you may get better results instead by choosing the ".NET executable" application type on Application Settings: